Interest Rate Prominence in Consumer Decision‐Making

20 Pages Posted: 22 Feb 2018

See all articles by Carola Binder

Carola Binder

Haverford College - Department of Economics

Date Written: April 2018

Abstract

Variations in consumers' responsiveness to interest rates across households and over time have important implications for monetary transmission. Responses from the Michigan Survey of Consumers provide an indication of the degree to which interest rates are a prominent consideration in spending decisions, news recollection, and financial situations. Prominence is strongest in housing attitudes, increases with income, education, and homeownership, and declined in the Great Recession. Rate prominence is associated with stronger responsiveness of consumption attitudes to monetary policy.

JEL Classification: D84, D91, E21, E40, E50

Suggested Citation

Binder, Carola, Interest Rate Prominence in Consumer Decision‐Making (April 2018). Economic Inquiry, Vol. 56, Issue 2, pp. 875-894, 2018, Available at SSRN: https://ssrn.com/abstract=3127903 or http://dx.doi.org/10.1111/ecin.12537

Carola Binder (Contact Author)

Haverford College - Department of Economics ( email )

Haverford, PA 19041
United States

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